Why is there so much cross-border M&A

Why is there so much cross-border M&A

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The trend of increasing cross border M&A has accelerated with the globalization of the world economy.

Growing interdependence and the entrance of foreign players as cross-border M&A causes

The growing interdependence between worldwide economies has increased corporate transactions between countries. Companies need to acquire enough critical mass to be able to compete against global players.

The entrance of larger, competitive foreign players shrink margins and at the same time force local companies to spend more to keep up with their research, development and innovation capacities. To survive, many companies are forced to merge in order to reduce cost or gain enough market share to create economies of scale.

DO YOU WANT TO KNOW MORE ABOUT HOW TO DEAL WITH MARGINS THAT ARE GETTING STRETCHED? HAVE A LOOK AT “IF YOUR PROFITABILITY IS DECREASING, REACT BEFORE IT´S TOO LATE

Having to deal with foreign companies that are more competitive in terms of cost, size, research capacity, development or innovation, means that many companies need to look for ways to reduce costs via productive synergies with similar companies or obtain a sufficient market share in order to produce economies of scale.

Cross-border M&A and sell-side operations

The good news for sellers is that strategic acquirer are willing to pay a premium in a cross border transaction. Also, in a cross border deal, the buyer is usually willing to respect the management team of the target company.

When analyzing who might be the best buyer for your company, the key is discovering which company is the one that can obtain the most value by acquiring your company and, as such, can share more of this value with you by paying the most.

Remember that the best buyers aren’t looking for you. You are the one who needs to find them and woo them.

A big percentage of the success of a sell side operation depends on the search of the best potential buyers worldwide and reaching out to the key people in those organizations, always with confidentiality throughout the entire process.

DO YOU WANT TO LEARN MORE ABOUT SELL-SIDE OPERATIONS? GO TO SELL-SIDE SECTION AND DISCOVER HOW TO SELL YOUR COMPANY!

This article was written by Enrique Quemada, ONEtoONE President.

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Risk Arbitrage and Cross-Border M&A | ONEtoONE Corporate Finance REPLY 16 May. 2018

[…] IF YOU ARE INTERESTED IN LEARNING MORE ABOUT CROSS-BORDER M&A, HAVE A LOOK AT “WHY IS THERE SO MUCH CROSS-BORDER M&A“ […]

Is your business stranded? You are ready for M&A | ONEtoONE Corporate Finance REPLY 24 May. 2018

[…] growing interdependence of economies across the planet has accelerated cross-border M&A deals, forcing local companies to search sufficient critical mass to compete against global […]

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